Oddity Tech Ltd (ODD): Financial results for Q2 2026
Oddity Tech Ltd (ODD) furnished an SEC Form 6-K — earnings release. Exhibit 99.1 ODDITY TECH REPORTS SECOND QUARTER 2026 RESULTS, EXPECTS SEQUENTIAL REVENUE IMPROVEMENT IN THE THIRD QUARTER · Second quarter net revenue of $181 million, down approximately 25% year-over-year · Second quarter adjusted EBITDA of $13 million · Second quarter net incom
How this was made
The 30-second read
Why it matters
The earnings release highlights a significant revenue contraction but also a large share repurchase program, creating mixed signals for traders.
Market read
Primary earnings disclosure with fresh guidance and buyback details; relevant for short‑term traders and sector analysts.
What to watch
Improving performance of SpoiledChild and METHODIQ could offset the revenue decline later in the year.
ODDITY TECH REPORTS SECOND QUARTER 2026 RESULTS, EXPECTS SEQUENTIAL REVENUE IMPROVEMENT IN THE THIRD QUARTER
Second-quarter net revenue declined 25% year-over-year and profitability contracted sharply, but results met the high end of net-revenue guidance and exceeded Adjusted EBITDA guidance. Management guided to a materially improved approximately 5% year-over-year revenue decline in the third quarter while continuing buybacks and note repurchases.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net revenueGAAP | $180,517 | – | a decrease of 25% |
| Cost of revenueGAAP | $56,571 | – | – |
| Gross profitGAAP | $123,946 | – | – |
| Gross marginGAAP | 68.7% | – | – |
| Selling, general and administrativeGAAP | $125,206 | – | – |
| Operating lossGAAP | $(1,260) | – | – |
| Financial income, netGAAP | $(16,533) | – | – |
| Income before taxes on incomeGAAP | $15,273 | – | – |
| Taxes on incomeGAAP | $2,383 | – | – |
| Net incomeGAAP | $12,890 | – | – |
| Adjusted EBITDAnon-GAAP | $12,873 | – | – |
| Adjusted net incomenon-GAAP | $10,737 | – | – |
| Basic earnings per share attributable to Class A and Class B Ordinary shareholdersGAAP | $0.27 | – | – |
| Diluted earnings per share attributable to Class A and Class B Ordinary shareholdersGAAP | $0.24 | – | – |
| Adjusted diluted earnings per sharenon-GAAP | $0.20 | – | – |
| Weighted-average number of shares – basic (thousands)other | 47,683 | – | – |
| Weighted-average number of shares – diluted (thousands)other | 54,084 | – | – |
| Six-month net revenueGAAP | $378,457 | – | – |
| Six-month gross profitGAAP | $261,916 | – | – |
| Six-month operating lossGAAP | $(26,750) | – | – |
| Six-month net lossGAAP | $(8,471) | – | – |
| Six-month Adjusted EBITDAnon-GAAP | $5,837 | – | – |
| Six-month adjusted net incomenon-GAAP | $953 | – | – |
| Six-month net cash used in operating activitiesGAAP | $(5,945) | – | – |
| Six-month free cash flownon-GAAP | $(7,504) | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Online direct-to-consumerOnline direct-to-consumer revenues are generated directly by ODDITY through its online platform only (i.e., ILMAKIAGE.com, SpoiledChild.com, and METHODIQ.com). | $174,058 | – | – |
| Other (Israel retail, marketing affiliates)All revenue in Israel, including revenue generated in stores, online, and from beauty academies, is included in Other. | $6,459 | – | – |
Third quarter ending September 30, 2026; full year ending December 31, 2026 outlook
- RevenueThird quarter net revenue to decline by approximately 5% year-over-year; full year net revenue to decline by approximately 19% year-over-year
- NoteThird quarter Adjusted EBITDA between $18 million and $20 million
- NoteFull year Adjusted EBITDA between $30 million and $32 million
- NoteSpoiledChild is on track to grow at least 35% compared to 2025 and approach $350 million of net revenue in 2026.
- NoteMETHODIQ is expected to deliver first-year net revenue ahead of SpoiledChild's first year.
Capital returns
- ODDITY repurchased approximately 5.6 million Class A ordinary shares during the second quarter for approximately $80 million under the $200 million share buyback plan authorized in March 2026.
- On a year-to-date basis, ODDITY has repurchased approximately 11.7 million Class A ordinary shares for approximately $163 million, including approximately $50 million of repurchases completed before the adoption of the 2026 Buyback Plan.
- Repurchases reduced total ordinary shares outstanding by approximately 20%.
- Approximately $87 million remains under the 2026 Buyback Plan, subject to market conditions and legal and regulatory constraints.
- In June 2026, ODDITY repurchased and retired $50 million aggregate principal amount of its 0% exchangeable notes due 2030 for approximately $35 million.
- Repurchase and retirement of Class A ordinary shares was $(162,778) for the six months ended June 30, 2026.
What drove it
- SpoiledChild delivered double-digit revenue growth during the second quarter.
- Management cited strong early results for METHODIQ.
- Management said the third-quarter year-over-year net-revenue trend improved, driven by growth at SpoiledChild and METHODIQ and a moderating impact from the IL MAKIAGE account dislocation.
- ODDITY implemented various tests and strategies to address signal distortion and retrain the advertising algorithm at IL MAKIAGE.
- Gross margin was 68.7% compared to 72.3% in the second quarter of 2025.
- Financial income, net was $(16,533), including the $13.539 million gain on repurchases of exchangeable notes identified in the adjusted-net-income reconciliation.
Concerns
- Net revenue decreased 25% year-over-year in the second quarter.
- ODDITY recorded an operating loss of $(1,260), compared to operating income of $57,094 in the second quarter of 2025.
- Net income was $12,890 compared to $49,285, while Adjusted EBITDA was $12,873 compared to $69,516.
- The IL MAKIAGE advertising algorithm dislocation with ODDITY's largest advertising partner remains unresolved.
- Full-year net revenue is expected to decline by approximately 19% year-over-year.
- Six-month net cash used in operating activities was $(5,945), compared to $101,384 in the prior-year period.
What to watch
- Progress toward normalization of the IL MAKIAGE account dislocation and the effectiveness of efforts to address signal distortion and retrain the algorithm.
- Whether third-quarter net revenue declines by approximately 5% year-over-year as guided.
- SpoiledChild's progress toward at least 35% growth compared to 2025 and approaching $350 million of net revenue in 2026.
- METHODIQ's first-year net revenue performance.
- Third-quarter Adjusted EBITDA performance against the $18 million to $20 million outlook.
- Further activity under the approximately $87 million remaining authorization of the 2026 Buyback Plan.
Balance sheet and cash flow
- Total cash and investments were $561,184 as of June 30, 2026, compared to $776,020 as of December 31, 2025.
- Cash, restricted cash, and cash equivalents were $167,296 as of June 30, 2026, compared to $402,279 as of December 31, 2025.
- Marketable securities were $393,888 as of June 30, 2026, compared to $373,741 as of December 31, 2025.
- Exchangeable Note was $537,246 as of June 30, 2026, compared to $584,368 as of December 31, 2025.
- Aggregate credit facilities were $350 million and remain undrawn.
- Net cash used in operating activities was $(5,945) for the six months ended June 30, 2026, compared to $101,384 for the six months ended June 30, 2025.
- Purchase of property and equipment was $(1,559) for the six months ended June 30, 2026, compared to $(1,951) for the six months ended June 30, 2025.
- Net cash used in investing activities was $(31,087) for the six months ended June 30, 2026, compared to $(39,616) for the six months ended June 30, 2025.
- Net cash used in financing activities was $(197,876) for the six months ended June 30, 2026, compared to $544,352 for the six months ended June 30, 2025.
Analysis
ODDITY reported second-quarter net revenue of $180,517, down from $241,140 in the second quarter of 2025, with gross profit of $123,946 compared with $174,352. Gross margin declined to 68.7% from 72.3%. Online direct-to-consumer revenue was $174,058, while Other revenue was $6,459. Management attributed the improved early third-quarter revenue trend to growth at SpoiledChild and METHODIQ and a moderating impact from the IL MAKIAGE account dislocation.
Profitability declined materially from the prior-year quarter. Selling, general and administrative expense was $125,206 versus $117,258, producing an operating loss of $(1,260) compared with operating income of $57,094. Net income was $12,890 versus $49,285, and diluted earnings per share was $0.24 versus $0.79. Adjusted EBITDA was $12,873 versus $69,516, while adjusted diluted earnings per share was $0.20 versus $0.92.
The first-half figures underscore the pressure on earnings and cash generation. Six-month net revenue was $378,457 compared with $509,216, net loss was $(8,471) compared with net income of $87,116, and Adjusted EBITDA was $5,837 compared with $121,920. Net cash used in operating activities was $(5,945), compared with $101,384, and free cash flow was $(7,504), compared with $99,433.
Liquidity remained substantial despite capital deployment. Total cash and investments were $561,184 at June 30, 2026, and aggregate credit facilities of $350 million remained undrawn. ODDITY repurchased approximately 5.6 million Class A ordinary shares for approximately $80 million during the quarter and approximately 11.7 million shares for approximately $163 million year to date. It also repurchased and retired $50 million aggregate principal amount of 0% exchangeable notes due 2030 for approximately $35 million, leaving approximately $550 million aggregate principal amount outstanding.
The outlook calls for a sequentially improved but still negative revenue trajectory. ODDITY expects third-quarter net revenue to decline by approximately 5% year-over-year and Adjusted EBITDA between $18 million and $20 million. For the full year ending December 31, 2026, it expects net revenue to decline by approximately 19% year-over-year and Adjusted EBITDA between $30 million and $32 million. The key operating issue remains the technical advertising-algorithm dislocation at IL MAKIAGE, while the reported growth at SpoiledChild and early METHODIQ results are the stated offsets.
Management, verbatim
We made progress during the quarter, including strong results for both SpoiledChild and METHODIQ. We remain hopeful that IL MAKIAGE is on track to achieve normalization and we continue to work in close partnership with our largest advertising partner to solve the technical issue.
Oran Holtzman, ODDITY co-founder and CEO
So far in the third quarter, we are seeing an improved year-over-year net revenue trend, driven by growth at SpoiledChild and METHODIQ and a moderating impact from the IL MAKIAGE account dislocation. As a result, we now expect third quarter net revenue to decline approximately 5% year-over-year, a meaningful sequential improvement from the first half.
Lindsay Drucker Mann, ODDITY Global CFO
Not in the filing
stated, not guessed- Q2 2026 operating cash flow
- Q2 2026 free cash flow
- Q2 2026 capital expenditures
- Brand-level revenue for IL MAKIAGE, SpoiledChild, and METHODIQ
- Year-over-year growth rates for Online direct-to-consumer and Other revenue
- Quarter-over-quarter comparisons for reported financial metrics
- Third-quarter gross margin guidance
- Third-quarter operating-expense guidance
- Third-quarter tax-rate guidance
- Full-year gross margin guidance
- Full-year operating-expense guidance
- Full-year tax-rate guidance
- Quantitative reconciliation of Adjusted EBITDA outlook to GAAP net income
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Oddity Tech Ltd (NASDAQ: ODD) is a technology firm focused on advertising platforms and molecular discovery.
Ticker impact
Oddity Tech Ltd reported Q2 2026 results with revenue down 25% YoY, net income $13M and provided Q3 guidance of a 5% revenue decline and $18-20M adjusted EBITDA.
Potential short-term downside of 3-5% as investors digest lower revenue and guidance.
Revenue decline and guidance below expectations dominate, but the sizable buyback tranche could mitigate sell pressure.
Market effects
Signals continued softness in the digital advertising technology sector, potentially affecting peers.
Limited to U.S. and Nasdaq-listed tech stocks.
Minimal global impact beyond sector.
Counterpoint
Buyback size may indicate confidence; investors could view the repurchase as a catalyst for a rebound.
Key entities
- companyOddity Tech Ltd
NASDAQ-listed technology company reporting Q2 2026 results.
- business unitSpoiledChild
Oddity's advertising product line showing double‑digit growth.
